COMPANY LAW QUESTION

Twenty five ago, Thomas applied for and was granted a scholarship to further his study in fashion designing for young persons in the New York Imperial University. After graduated with a first class honour degree, Thomas started his career in a fashion house in New York City. On 1st January 2020, Thomas returned to Malaysia and intended to set up a fashion house targeted at young customers of high-income level. However, Thomas was unfamiliar with the real property market in Malaysia. Thomas told his neighbor, Andy about his business plan and his problem with the real property in Malaysia. Andy said, Dont worry, Thomas. I can assist you to source for a suitable location. I guarantee you will be happy with my recommendation. On 1st January 2021, Thomas incorporated a company called Royal Kids Fashion Sdn Bhd (Royal Kids). On 15th January 2021, Andy found one unit in a strategically located shopping mall at a value of RM1.2 million. Thomas was very pleased with the unit and the purchase transaction was fast completed. Royal Kids started to occupy the unit in preparation for business operation. At this time, Thomas has recruited ten shareholders and five directors. On 1st April 2021, Thomas left for New York City to purchase some latest teenagers fashion for Royal Kids. On 3rd April 2021, the five directors visited Royal Kids. Andy attended to the directors. Andy told the directors that the price of the property unit was RM1.5 million. The five directors thought the price was too high and they started an investigation. Soon the directors found out the real value of the unit, they were very unhappy. They want Royal Kids to bring an action against Thomas and Andy. Advise Royal Kids. (30 marks)

** answering formula : Identification of the issue

Explanation of the law

Application of the Law

Conclusion